Tag: ASX:CCL

Since posting an intra-day low of $7.52 on November 24th, shares of CCL have been carving out an ascending flag formation.

This is a bullish continuation pattern and is bounded by support at $8.05 and resistance at $8.65. A break of the $8.65 level would point to a measured move targeting the June highs near $9.40.

CCL is due to report earnings next Wednesday, the 21st.

In late November, the company advised that profits for the 12 months to December were expected to be $13 million higher than the consensus of $405 million.

CCL is scheduled to pay a 25 cent dividend on February 27th. At the current price, that pencils out to an annual yield of 5.5%.

Technically, an ASX close above $8.45 would suggest range extension to the $8.65 level.

Coca Cola Amatil

After posting a 9-year low at $7.50 on November 24th, shares of CCL have climbed over 12% and are currently at $8.52.

CCL traded as high as $10.85 last March and technically looks as though the share price has bottomed.

The $250 million share buyback scheme has lowered the NPAT to $190 million but return on capital has increased to 20% in H1 2017.

Aside from their carbonated products, CCL has a growing presence in the alcohol and coffee sector across Australia, New Zealand and Indonesia.

CCL will go ex-dividend on February 27th and pay 25 cents per share, fully franked. At the current share price, that equals a 5.4% yield.

The internal momentum indicators are rising and we see the next level of resistance at $8.95.

Coca-Cola Amatil

Since trading at a three-year high of $10.80 in late March, shares of CCL have slid almost 30% to post a nine-year low of $7.66 on October 6th.

Buyers returned last week and lifted the share price back over $8.10.

One of the likely reasons for investors’ interest was that the US Coca-Cola Company has recently increased their shareholding in CCL from 29.4% to 30.4%.

This increased stake has been part of the $350 million share buyback scheme announced by CCL earlier this year.

At this point we don’t have an ALGO buy signal on CCL, but will update as more price sensitive information comes forward.

Technically, we see the next level of price resistance in the $8.60 area.

Coca-Cola  Amatil

Coca Cola announced 1H17  underlying NPAT fell 4.3%, to $190 million. The company declared an interim dividend of 21 cents,  which is 75%
franked.

Forward guidance suggest relatively flat EPS  will continue with full year NPAT expected to be $420 million.

Indonesia and PNG are delivering improved earnings metrics and we have the company on a forward dividend yield of 5.4%, assuming 44 cents in annualised DPS.

CCL downgraded its outlook for 1H17 due to weakness in the Australian beverage performance.

CCL expects underlying NPAT will decline in 1H17 and expects FY17 NPAT to be in line with FY16 at around $420m

If we assume no earnings growth into FY18 and a continuation of the $0.45 cent per year dividend, it places the stock on a forward yield of 4.6%.

FY18 revenue $5.2b, EBIT $680m & EPS $0.54.

Coca Cola delivered  solid 2016 earnings result (+6.2%), which met market expectations. The announcement of a $350 million share buyback was  a positive surprise.

Structural pressures from shrinking CSD consumption will need to be off-set by continued cost out programs, such as the announced closure of the SA bottling plant.

A positive trend remains the growth in Indonesia/PNG, which delivered double-digit earnings over the past 12 months.

Looking into 2017, we expect revenue of $5.2billion, EBITDA $980m, EPS $0.58 and DPS of $0.48 placing the stock on a forward yield of 4.8%.

We own CCL in client portfolios and we’ve been selling tight covered call options to boost the cash flow to 10 – 12%+ on an annualised basis.

CCL has it challenges as consumer trends continue to move away from large volume consumption of carbonated sugar drinks. CCL is responding through new product ranges and reducing the size of both cans and bottles.

$100m in cost savings along with automation and efficiency gains in the production facilities will help to offset any revenue weakness. Our base case for CCL on a 12 to 24 month outlook is for relatively flat revenue and EPS growth.

FY17 revenue $5.2b, EBIT $680m, EPS $0.55, DPS $0.45 places the stock on a forward yield of 4.8% and a PE ratio of 17x.

We’ve been active in selling covered calls over CCL as we’ve maintained full value is around $9.50.  Keep CCL on your radar as a pull back to $9.00 is worth considering as an entry point to buy the stock. We think CCL trades in a consolidation channel over the next 12 months. A combination of the dividend and option premium produces 10% annualised cash flow.